Value Chain and Health Care Providers, Essay Example

It is important for a health care provider to consider the value chain in the process of market segmentation.  Value chain consists of different segments of activities, such as pre-service, point-of-service, and after-service, all aimed at adding value for stakeholders. At the same time, support activities need to add value through organization culture, organizational structure, and strategic resources. Directional, adaptive, market entry, and competitive strategies are completed through the means of service delivery strategies, support strategies, and action plans. In order to complete a value-adding strategy, it is important to review the value chain. This way leaders can identify where the organization can create value for patients and other stakeholders. A health care organization needs to complete a situational analysis, which includes an internal analysis (focusing on value chain). Value adding strategies need to be developed based on the analysis results. Decisions whether or not the organization should maintain its strategy, expand, or contract can be made. In the market segmentation process, health care organizations can help decide whether the organization should focus on broad or narrow market (segment)s. For identifying a market segment that has a high demand for services, the situational analysis needs to be completed.

It is also important to focus on the value adding supportive strategies when developing a strategy. Organizational culture has an impact on the overall performance of the health care provider, through increased effectiveness. Strategies, on the other hand, should be linked to the results of the situational analysis. Strategy alternatives need to be evaluated based on whether or not they address an external issue, draw or fix a competitive advantage. Further, it needs to be determined whether or not the alternative moves the organization closer to its vision, and achieves one or more strategic goals. The alignment of the strategy with the support activities (shared assumptions, vision, values, and behavior) can strengthen the value chain, increase the value provided for stakeholders, improve performance, and result in greater competitive advantage (Swayne). Therefore, analyzing the value chain in health care organizations helps decisionmakers create strategies that take the unit closer to its mission and objectives.

Works Cited

Swayne, Linda E., W. Jack Duncan, and Peter M. Ginter. Strategic management of health care organizations. John Wiley & Sons, 2012.